Shares of technology companies traded off the highest levels of the day while the broader U.S. equity market rallied as signs of strengthening labor market helped to temper concern over increasing price pressures.

Telsa weighed on the tech-heavy Nasdaq 100 after Chief Executive Elon Musk said the electric-vehicle manufacturer is suspending purchases using Bitcoin, triggering a slide in the digital currency. Financials and utilities helped the benchmark S&P 500 halt a three-day slide. Energy was the only one of the 11 market sectors to decline. A report earlier showed producer prices increased by more than forecast in April, and jobless claims fell.

“Taking a step back from inflation, the fact that jobless claims hit another pandemic-era low suggests we’re inching even closer to full reopening, which is no doubt a good thing,” said Mike Loewengart, managing director of investment strategy at E*Trade Financial.

U.S. Producer Prices Top Forecasts, Adding to Inflation Pressure

Confidence that reigned supreme until two weeks ago on the U.S. economy and continued Federal Reserve stimulus has been jolted in the past week with non-farm payrolls falling far short of expectations and inflation rising by the most since 2009. While some investors insist the surge in consumer prices is a one-off reopening burst, the broader markets are hedging against the possibility it may persist and force the Fed to consider tapering its stimulus.

“Markets have lost a little bit of confidence that the Fed has control of inflation” and the concern was that the central bank might wait too long to address the rise, Victoria Fernandez, Crossmark Global Investments chief market strategist, said on Bloomberg TV. “I am not sure the market is extremely comfortable with that at this point.”

Musk tweeted that Tesla will no longer accept the digital currency for vehicle purchases due to environmental concerns.

Alibaba dropped after reporting fourth-quarter results. While revenue beat estimates, the company posted a net loss after an antitrust fine.

In Europe, earnings disappointments sent the benchmark gauge lower. BT Group Plc dropped as it missed estimates. Burberry Group Plc declined as guidance disappointed.

Treasury markets were calmer, with the 10-year rate holding near 1.69%.

Have your say on MLIV’s Question of the Day. Which Assets Hurt If CPI Isn’t Transitory?

These are some of the main moves in markets:

Stocks

• The S&P 500 rose 1.1%, more than any closing gain since April 23 as of 12 p.m. New York time
• The Nasdaq 100 rose 0.7%, more than any closing gain since May 7
• The Dow Jones Industrial Average rose 1.2%, more than any closing gain since March 26
• The Stoxx Europe 600 fell 0.1%
• The MSCI World index rose 0.2%, more than any closing gain since May 7

Currencies

• The Bloomberg Dollar Spot Index was little changed
• The euro was little changed at $1.2068
• The British pound fell 0.2% to $1.4030
• The Japanese yen was little changed at 109.58 per dollar

Bonds

• The yield on 10-year Treasuries declined three basis points, more than any closing loss since May 3
• Germany’s 10-year yield advanced zero basis points to the highest in more than 23 months
• Britain’s 10-year yield advanced one basis point, climbing for the fourth straight day, the longest winning streak since April 29

Commodities

• West Texas Intermediate crude fell 3.3%, the most since April 5
• Gold futures rose 0.1% to $1,826 an ounce

— With assistance by Andreea Papuc, and Emily Barrett